• Deal to garner about 600 mln pounds
• Values company at about 1.75 bln pounds
• Apax bought 49.9 pct stake in 2007
Terms were not disclosed, but two sources familiar with the matter told Reuters that the deal gives Trader Media Group, owner of the Auto Trader car sales website, an enterprise value of about 1.75 billion pounds ($2.87 billion).
The loss-making Guardian made its own headlines with its reporting last year of leaks from former U.S. spy agency contractor Edward Snowden,
Though Trader Media Group – Britain’s leading website for buying and selling new and used cars – helped to offset operating losses at GMG newspapers, GMG Chief Executive Andrew Miller said the proposed deal makes strategic sense as the company focuses on its digital and print journalism.
“On completion, the sale proceeds will strengthen our balance sheet and position us for further investment and growth in our core business,” Miller said of the deal, which is subject to regulatory approval,
GMG, which includes the Guardian, the Observer and guardian.com, reported revenue from continuing operations of 207 million pounds in the year to Mar. 31, 2013, and an overall operating loss of 47 million pounds, an improvement on the 63 million pounds recorded 12 months earlier.
Within those results, GMG received 38 million pounds from its stake in Trader Media, the company said.
“This deal will make GMG a very well-capitalized media organization with the financial flexibility to navigate the rapidly changing media environment,” Neil Berkett, chairman of the GMG board, said.
GMG said that its sole shareholder the Scott Trust, which was set up in 1936 to safeguard the liberal values of the newspaper, supported the deal.
The Guardian has also been known in recent years for breaking the story of phone hacking at Rupert Murdoch’s now-defunct News of the World tabloid.
Apax bought a 49.9 percent stake in Trader Media in 2007 in a deal that valued the company at 1.35 billion pounds including debt.
Apax was advised by JPMorgan and GMG by Bank of America Merrill Lynch.
Kate Holton and Anjuli Davies are reporters for Reuters News in London